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United States Government Accountability Office:
GAO:
Testimony:
Committee on Transportation and Infrastructure, House of
Representatives:
For Release on Delivery:
Expected at 10:30 a.m. EDT:
Wednesday, April 17, 2013:
Federal Courthouses:
Most Recommended New Construction Projects Do Not Qualify Under
Improved Capital-Planning Process:
Statement of Mark L. Goldstein, Director:
Physical Infrastructure Issues:
GAO-13-523T:
Chairman Bill Shuster, Ranking Member Nick J. Rahall, II, and Members
of the Committee:
I am pleased to be here today to discuss the federal judiciary's
(judiciary) capital-planning efforts for new courthouses. Since the
early 1990's, the judiciary and the General Services Administration
(GSA) have undertaken a multibillion-dollar federal courthouse
construction program. To date this program has resulted in 78 new
courthouses or annexes[Footnote 1] and 16 projects that are currently
in various stages of development. However, rising costs and other
budget priorities have slowed the construction program. In addition,
we previously found that recent federal courthouses had been
constructed larger than necessary because of poor planning, oversight,
and inefficient courtroom use.[Footnote 2] In 2008, the judiciary
began using a new capital-planning process, called the Asset
Management Planning (AMP) process, to assess, identify, and rank its
space needs. Judiciary officials said that the AMP process addresses
concerns about growing costs and incorporates best practices related
to capital planning.
Today, we are releasing a report that addresses the (1) the extent to
which the judiciary's capital-planning process aligns with leading
practices and provides information needed for informed decision making
related to new courthouses and (2) the extent to which courthouse
projects recommended for funding in fiscal years 2014 to 2018 were
assessed under the judiciary's AMP process.[Footnote 3] My statement
highlights the key findings and recommendations of this report. Our
review focused on courthouse projects on the judiciary's current 5-
year plan for fiscal years 2014 to 2018. As part of this work, we
analyzed judiciary and GSA documents, interviewed judiciary and GSA
officials in their Washington, D.C., headquarters and visited federal
courthouses in Anniston, Alabama, and Macon and Savannah, Georgia. We
selected these sites because the courthouses were highly ranked by the
judiciary for replacement. We conducted this performance audit from
March 2012 to April 2013 in accordance with generally accepted
government auditing standards. Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
AMP Process Represents Progress in Capital Planning but Does Not
Provide Needed Information to Decision Makers:
The AMP process, which the judiciary has applied to about 67 percent
of its courthouses, represents progress by the judiciary in aligning
its capital-planning process with leading capital-planning practices,
but the document the judiciary uses to request courthouse construction
projects from Congress lacks transparency and key information. For
example, the AMP process better aligns with leading practices for
identifying real property needs by establishing a comprehensive,
nationwide 328-factor analysis of every courthouse, whereas the
previous process only assessed courthouses when requested by a local
judicial district. However, the AMP process does not fully align with
several leading practices due to, for example, its lack of linkage to
the judiciary's strategic plan. Two courthouse projects illustrate how
the AMP process has changed the way the judiciary evaluates its need
for new courthouses. Specifically, two projects listed on a previous 5-
year plan (covering fiscal years 2012 through 2016) were re-evaluated
under AMP--San Jose, California, and Greenbelt, Maryland. Both had
ranked among the top 15 most urgent projects nationwide under the
previous capital-planning process, and as such, the judiciary
prioritized them for new construction in 2010. However, after the
judiciary evaluated the San Jose and Greenbelt projects under the AMP
process, their nationwide rankings fell to 117 and 139, respectively.
Judiciary officials explained that this drop was largely because of
the completion of additional AMP assessments, coupled with reduced
space needs in both locations because of courtroom-sharing.[Footnote
4] Following the change in rankings, GSA and the judiciary determined
that repair and alteration projects that reconfigure existing space in
these two locations could alternatively address the judiciary's needs.
The judiciary added that its decision saved taxpayers money. As a
result, at the request of the judiciary, the Judicial Conference of
the United States removed the two projects from the 5-year plan.
However, the judiciary's current 5-year plan--the end product of its
capital-planning process--does not align with leading practices for a
long-term capital plan in several ways and, as a result, lacks
transparency and key funding information. Specifically, judiciary's
one-page 5-year plan, as shown in figure 1, does not provide a summary
of why each project is more urgent than others, information on
complete cost estimates, and alternatives to new construction the
judiciary considered. Although the 5-year plan lists about $1.1
billion in estimated costs, which are the funds described as needed
for that specific 5-year period, these costs only include part of the
project phases. The estimated cost of all project phases--site
acquisition, building design, and construction--comes to $1.6 billion
in 2013 dollars.[Footnote 5] In addition, while no longer included in
the 5-year plan, the judiciary estimated that it would need to pay GSA
$87 million annually in rent, or $1.6 billion over the next 20
years,[Footnote 6] to occupy these courthouses if constructed.
Although a $3.2-billion combined project cost and rent estimate
provides a more complete presentation of the project costs, that
estimate could change based on GSA's redesign of projects because of
changes in the judiciary's needs. In addition, the $3.2-billion
estimate does not include life-cycle costs, such as furniture and GSA
disposal of existing facilities, which would also have to be included
for the cost estimates of life-cycle costs[Footnote 7] are necessary
for accurate and informed capital planning.
Figure 1: Judiciary's 5-year Courthouse Project Plan for Fiscal Years
2014 to 2018, as of September 12, 2012:
[Refer to PDF for image: table]
Five-Year Courthouse Project Plan for FYs 2014-2018 As Approved by the
Judicial Conference of the United States:
September 11, 2012:
Estimated dollars in millions:
FY 2014:
1. Mobile, AL[A];
Plan: Additional Construction;
Cost: $54.9 million;
Score: 59.8.
2. Nashville, TN;
Plan: Additional Site, Design, and Construction;
Cost: $144.0 million;
Score: 67.3.
3. Savannah. GA;
Plan: Additional Construction;
Cost: $95.5 million;
Score: 61.3.
4. Norfolk, VA;
Plan: Additional Site and Design;
Cost: $12.0 million;
Score: 57.4.
FY 2014 Total cost: $306.4 million.
FY 2015:
1. San Antonio, TX;
Plan: Additional Site, Design, and Construction;
Cost: $117.4 million;
Score: 61.3.
2. Charlotte, NC;
Plan: Additional Construction;
Cost: $165.7 million;
Score: 58.5.
3. Greenville, SC;
Plan: Additional Construction;
Cost: $78.8 million;
Score: 58.1.
4. Harrisburg, PA;
Plan: Additional Construction;
Cost: $118.6 million;
Score: 56.8.
FY 2015 Total cost: $480.5 million.
FY 2016:
1. Norfolk, VA;
Plan: Additional Construction;
Cost: $104.7 million;
Score: 51.4.
2. Anniston, AL;
Plan: Additional Design and Construction;
Cost: $41.0 million;
Score: 57.1.
3. Toledo, OH;
Plan: Additional Construction;
Cost: $109.3 million;
Score: 54.4.
FY 2016 Total cost: $255.0 million.
FY 2017:
1. Chattanooga, TN;
Plan: Site and Design;
Cost: $21.5 million;
Score: 37.3
2. Des Moines, IA;
Plan: Site and Design;
Cost: $43.0 million;
Score: 35.3.
FY 2017 Total cost: $64.5 million.
FY 2018:
None.
All cost estimates subject to final verification with GSA.
[A] Congress provided $50.0 out of $104.9 million needed for Mobile,
AL in December 2009.
Source: Federal Judiciary.
Note: The higher the "score," the greater the space need urgency.
[End of figure]
Since fiscal year 1995, Congress has appropriated about $177 million
of the estimated $1.6 billion needed for 10 of the 12 projects on the
5-year plan, mostly for site acquisition and designs (see fig. 2).
None of the projects has begun construction, and only the Mobile
project has received any construction funding. According to GSA
officials, the agency has not received funding for the design of two
projects (Chattanooga and Des Moines). Of the remaining 10 projects
that have design funding, one is in the design process and nine are on
hold. According to GSA officials, some of the projects on hold must be
re-designed to accommodate policy and other requirements relating to,
for example, changes such as courtroom-sharing and energy
management.[Footnote 8] For example, the design of the Savannah
courthouse project was completed in 1998 and now needs extensive re-
design to accommodate changes mandated by policy shifts, including
improved security and a reduced number of courtrooms needed. GSA
officials said that only the design of the Nashville project--though
oversized by one floor--is likely to remain largely intact because it
would be more cost-effective to rent the additional space to other
tenants than to completely re-design the project.
Figure 2: Funding Status of Judiciary's 5-year Plan for Courthouse
Projects, 2013:
[Refer to PDF for image: stacked vertical bar graph]
Courthouse location: Mobile, AL;
Previously appropriated funds: $61.3 million;
Estimated funds needed: $153.8 million.
Courthouse location: Des Moines, IA;
Previously appropriated funds: $0;
Estimated funds needed: $201 million.
Courthouse location: Nashville, TN;
Previously appropriated funds: $21.8 million;
Estimated funds needed: $149.3 million.
Courthouse location: Chattanooga, TN;
Previously appropriated funds: $0;
Estimated funds needed: $161.4 million.
Courthouse location: Toledo, OH;
Previously appropriated funds: $8.5 million;
Estimated funds needed: $135 million.
Courthouse location: San Antonio, TX;
Previously appropriated funds: $11.6 million;
Estimated funds needed: $112.5 million.
Courthouse location: Savannah, GA;
Previously appropriated funds: $6.5 million;
Estimated funds needed: $116.7 million.
Courthouse location: Charlotte, NC;
Previously appropriated funds: $12 million;
Estimated funds needed: $110.1 million.
Courthouse location: Norfolk, VA;
Previously appropriated funds: $13.5 million;
Estimated funds needed: $96.9 million.
Courthouse location: Harrisburg, PA;
Previously appropriated funds: $26 million;
Estimated funds needed: $81.6 million.
Courthouse location: Greenville, SC;
Previously appropriated funds: $11 million;
Estimated funds needed: $81.6 million.
Courthouse location: Anniston, AL;
Previously appropriated funds: $4.4 million;
Estimated funds needed: $22.1 million.
Source: GAO analysis of Federal Judiciary and GSA data.
[End of figure]
Most Courthouse Projects Were Not Evaluated under AMP Process and Do
Not Meet AMP Criterion for New Construction:
The judiciary has not applied the AMP process to 10 of the 12
construction projects on the current 5-year plan dated September 2012.
These 10 projects were evaluated under the judiciary's prior capital-
planning process and approved based on their urgency levels as
determined under that process. Judiciary officials said that they did
not want to delay the projects or force them to undergo a second
capital-planning process review because the judiciary had already
approved the projects. Only 2 projects on the current 5-year plan were
assessed under the AMP process--Chattanooga, Tennessee, and Des
Moines, Iowa. Judiciary officials said these projects were added to
the 5-year plan in September 2010 because they had the highest
priority rankings of the projects that had undergone an AMP review at
that time. Judiciary officials explained that these projects also had
GSA feasibility studies that recommended new construction. However,
the Chattanooga and Des Moines projects have not retained their top
rankings as the judiciary has continued to apply the AMP process to
additional courthouses. Specifically, judiciary documents show that
more than a dozen other projects not included on the current 5-year
plan now rank above the Chattanooga and Des Moines projects, six of
which recommend new construction. For example, we visited the federal
courthouse in Macon, Georgia, which now ranks higher than either the
Chattanooga or Des Moines projects. The Macon courthouse suffers from
numerous operational and security issues typical of historic
courthouses, but it is not included on the 5-year plan. As we
previously noted, the judiciary also applied the AMP process to 2
other projects that were included on an older 5-year plan (2012 to
2016)--San Jose and Greenbelt--and subsequently removed them after the
projects received substantially lower priority rankings. The change in
the rankings of the 4 projects calls into question the extent to which
the projects remaining on the 5-year plan represent the judiciary's
most urgent projects and whether proceeding with these projects while
hundreds of AMP reviews remain to be done represents the most fiscally
responsible path.
We recognize that conducting AMP reviews of the 10 projects on the 5-
year plan would involve additional costs; however, not conducting AMP
reviews on these projects could involve spending $3.2 billion over the
next 20 years on courthouses that may not be the most urgent projects.
While the AMP process only partially aligns with leading practices in
capital-planning, it is a significant improvement over the capital-
planning process the judiciary used to choose 10 of the 12 projects on
the 5-year plan.
We found that 10 of the 12 projects the judiciary recommends on the
current 5-year plan do not qualify under the AMP process criterion of
requiring two or more additional courtrooms to qualify for new
construction. The judiciary's previous capital-planning process for
new courthouse projects had no minimum additional courtroom
requirement. In contrast, the AMP process stipulates that a new
courthouse is justified when an existing courthouse has a deficit of
two or more courtrooms, based on the number of judges located there
after applying courtroom-sharing policies.[Footnote 9] The judiciary
bases its estimates for the number of courtrooms needed on the number
of existing judges and the projected number of new judges it will have
in 15 years.[Footnote 10] We found that 10 of 12 cities with projects
on the 5-year plan currently have enough courtrooms in existing
courthouses in those cities based on the judiciary's standards, and 3
of those cities have more courtrooms than needed. Only 5 of the 12
projects on the 5-year plan currently need additional courtrooms, and
of those, only the Charlotte and Greenville projects would qualify
under the AMP criterion because both need three additional courtrooms.
We visited two courthouses on the current 5-year plan that were
selected as new construction projects under the prior capital-planning
process that do not qualify under the AMP courtroom shortage
criterion--Savannah and Anniston that were built in 1899 and 1906,
respectively. These historic courthouses qualified for new
construction under the previous process because of space needs and
security and operational deficiencies because of their age, condition
and building configuration. According to judiciary and GSA officials,
neither courthouse meets current standards for (1) the secure
circulation of prisoners, the public, and courthouse staff and (2) the
adjacency of courtrooms and judge's chambers. Nevertheless, neither of
these courthouses would qualify for new construction under the AMP
criterion as both have a sufficient number of existing courtrooms for
all the judges.[Footnote 11]
Judiciary Needs to Take Actions to Better Align AMP Process with
Leading Practices and Evaluate 5-Year Plan Projects:
In the report that we are releasing today, we are making several
recommendations to improve the judiciary's capital-planning process,
enhance the transparency of that process, and allow for more informed
decision making related to the federal judiciary's real property
priorities. We are recommending that the Director of the
Administrative Office of the U.S. Courts (AOUSC), on behalf of the
Judicial Conference of the United States, take the following actions:
* Better align the AMP process with leading practices for capital-
planning. This should include linking the AMP process to the
judiciary's strategic plan and developing and sharing with decision
makers a long-term capital investment plan. In the meantime, future 5-
year plans should provide comprehensive information on new courthouse
projects, including:
- a summary of why each project qualifies for new construction and is
more urgent than other projects, including information about how the
AMP process and other judiciary criteria for new courthouse
construction were applied to the project;
- complete cost estimates of each project; and:
- the alternatives to a new project that were considered, including
courtroom-sharing, and why alternatives were deemed insufficient.
* Impose a moratorium on projects on the current 5-year plan until AMP
evaluations are completed for them and then request feasibility
studies for courthouse projects with the highest urgency scores that
qualify for new construction under the AMP process.
AOUSC agreed with our recommendation to link the AMP process to the
judiciary's strategic plan, but cited concerns that additional
information would duplicate information that GSA already provides
Congress. While we agree that the judiciary already provides some
information on its recommended projects and funding estimates to
stakeholders in the form of the 5-year plan, implementing our
recommendation would better align that information with leading
practices by making it more complete and transparent. AOUSC disagreed
with our recommendation for a moratorium on all projects currently on
the 5-year plan because completing AMP evaluations for those projects
would unnecessarily delay the projects and exacerbate existing
security and structural issues with the existing courthouses. We
recognize that the AMP process represents progress by the judiciary in
better aligning its capital-planning process with leading practices.
As a result, we believe that it is imperative for the judiciary to
complete AMP evaluations before proceeding with any 5-year plan
projects.
Chairman Bill Shuster, Ranking Member Nick J. Rahall, II, and Members
of the Committee, this concludes my prepared statement. I would be
happy to answer any questions that you may have at this time.
Contacts and Acknowledgments:
For further information regarding this testimony, please contact Mark
L. Goldstein at (202) 512-2834 or goldsteinm@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this statement. Individuals who made key
contributions to this testimony are Keith Cunningham, Assistant
Director; George Depaoli; Colin Fallon; Geoffrey Hamilton; James
Leonard; Faye Morrison; and Sara Ann Moessbauer.
[End of section]
Footnotes:
[1] An annex is an addition to an existing building. For the purpose
of this testimony, projects that include construction of an annex are
considered new courthouse projects.
[2] See GAO, Federal Courthouse Construction: Better Planning,
Oversight, and Courtroom Sharing Needed to Address Future Costs,
[hyperlink, http://www.gao.gov/products/GAO-10-417] (Washington, D.C.:
June 21, 2010). Specifically, we found that 33 federal courthouses
completed from 2000 to 2010 included 3.56-million square feet of extra
space that cost an estimated $835 million to construct and $51 million
annually to operate and maintain. We recommended that GSA should: (1)
ensure that courthouses are within their authorized size or notify
congressional committees; and that the judiciary should: (2) retain
caseload projections to improve the accuracy of its 10-year judge
planning and (3) establish and use courtroom-sharing policies based on
scheduling and use data. GSA and the judiciary agreed with the
recommendations, but expressed concerns with GAO's methodology and key
findings. GAO believes these to be sound, as explained in the report.
Our recommendations have not yet been implemented.
[3] GAO, Federal Courthouses: Proposed Construction Projects Should Be
Evaluated under New Capital-Planning Process, [hyperlink,
http://www.gao.gov/products/GAO-13-263] (Washington, D.C.: April 11,
2013).
[4] The judiciary's courtroom-sharing policies for senior district,
magistrate, and bankruptcy judges allow it to reduce the scope of its
courthouse projects.
[5] Inflated to current year based upon averages of monthly indexes
from U.S. Department of Labor, Bureau of Labor Statistics.
[6] GSA charges judiciary rent based upon the 20-year return on
investment of the cost of courthouse construction. Our analysis of
rent is based on OMB's published discount rate. OMB, 2013 Discount
Rates for OMB Circular No. A-94, Memorandum M-13-04 (Washington, D.
C.: Jan. 24, 2013).
[7] OMB's Capital Programming Guide defines the cost of a capital
asset is its full life-cycle cost, including all direct and indirect
initial costs for planning, procurement, operations, maintenance, and
disposal.
[8] See, e.g., Exec. Order No. 13423, Strengthening Federal
Environmental, Energy, and Transportation Management, 72 Fed. Reg.
3919 (Jan. 26, 2007) (Executive Order 13423 was codified into law by
section 746 of the Omnibus Appropriations Act, 2009 (Pub. L. No. 111-
8, 123 Stat. 524, 693)); Exec. Order No. 13514 , Federal Leadership In
Environmental, Energy, and Economic Performance, 74 Fed. Reg. 52117
(Oct. 8, 2009); and the Energy Independence and Security Act of 2007
(Pub. L. No. 110-140, 121 Stat. 1492).
[9] We did not assess if the shortage of courtrooms alone is the most
appropriate criterion for requesting new construction from GSA, but
the establishment of a clear criterion adds an element of transparency
that was lacking in the judiciary's previous capital-planning process.
[10] [hyperlink, http://www.gao.gov/products/GAO-10-417]. We
previously found that the judiciary has overestimated the number of
judges it would have after 10 years. However, the judiciary's estimate
of the number of future judges for the current 5-year plan projects
does not affect the number of courtrooms needed for those projects.
[11] According to GSA officials, regardless of whether a project is on
the 5-year plan, GSA is responsible for ensuring that courthouses are
adequately maintained.
[End of section]
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